DUBAI, July 5 (Reuters) – Several Middle East companies are planning IPOs in 2024 rather than this year, a senior Bank of America (BAC.N) official has said amid concerns of a global recession.
The global IPO market has been in the doldrums since early 2022, when Russia’s invasion of Ukraine and a surge in inflation dampened risk appetite as investors worried about unrelenting rate hikes.
But the Middle East proved a bright spot for IPOs last year and has largely held up so far, with several companies listing on exchanges in the United Arab Emirates and Saudi Arabia during the first half of the year.
“The pipeline is encouraging, although we don’t expect a big wave in the second half of the year. A lot of situations are focused on early or mid-next year rather than the end of this year,” James Palmer, Bank of America’s EMEA head of equity markets, said when asked about expected IPOs this year.
He declined to discuss concrete examples.
“Importantly, the market assessment of when we will hit peak interest rates is still a dynamic assessment and is fueling uncertainty. This is a market challenge that we must address,” added Palmer.
The US Federal Reserve paused a 15-month cycle of rate hikes – the most aggressive in decades – at its last monetary policy meeting, but markets expect another rate hike at the July Fed meeting.
Some Middle East issuers “are very comfortable believing in structural change in the region broadly, i. said Palmer.
The spate of IPOs in the Gulf region that began last year was fueled by government listing programs in Saudi Arabia, Abu Dhabi and Dubai.
Palmer added that he believes foreign investors would remain interested in IPOs in the Middle East.
Reporting by Yousef Saba, edited by Mark Potter
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